Richard Perry
Independent Analyst
Despite there being no explicit changes to the Fed statement, the very slightly hawkish lean has resulted in the switching once more of direction on EUR/USD. I have been talking of the recent rebound being counter trend and approaching some key medium term technical reasons why the sellers would be ready to return and so it appears to have been the case. The importance of the barrier that has become the falling 144 day moving average (currently $1.1105) is growing ever stronger. Back below the $1.1050 now means once more that the outlook is on the bearish side, and with the momentum indicators rolling over (specifically the Stochastics and the RSI), the rebound has certainly lost its way. Looking at the intraday hourly chart also backs this assertion with the broken uptrend, while the hourly moving averages and hourly momentum indicators taking on a corrective configuration. It would appear that once more rallies will be seen as a chance to sell. The near term resistance comes in at $1.1020 which had been acting as a floor and should help to contain any near term bounces today. I would expect further pressure on the initial support at $1.0965 before further downside to retest the low at $1.0860.
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